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Lower loan interest sought

01 November 2018

By Daisy CL Mandap

The consulates of the Philippines and Indonesia have held talks with the Hong Kong government on easing interest rates on loans, seen as one of the reasons why many migrant domestic workers get enmeshed in debt.

This was disclosed by Consul General Antonio A. Morales in his speech at the Oct. 14 launch of a new reintegration campaign for returning Filipino workers at the Philippine Overseas Labor Office in Wanchai.

Consul General Antonio A. Morales

“Last week, I and the consul general of Indonesia met with the Chief Secretary (Matthew Cheung) on the possibility of reducing interest rates and of course, the possibility of prosecuting those who get their (migrant workers) passports, Morales said.

He cited the most recent case of about 400 Philippine passports being seized from the house of a suspected loan shark in North Point. Last year, more than 800 passports, mostly belonging to Indonesians, were seized in a separate operation.

Morales sees the high interest rates on loans as one of the reasons why migrant workers end up saddled in debt.

In the case of the loan sharks, police have revealed that the interest rate charged to migrant workers who are asked to pawn their passports and employment contracts as security, is 125%.

It’s not known what, if any, steps will be taken by the Hong Kong government in response to the appeal by the two consulates. However, someone privy to the talks said the two consuls general were told during their meeting with the Chief Secretary to step up their education campaign to discourage heavy borrowing among their workers.

Consul Paulo Saret, in a separate interview, said the two diplomatic chiefs would call a joint press conference on Oct. 22 but it did not happen for unknown reasons.

Morales said it is part of his advocacy to get more Filipino migrant workers to save and plan for their future so they can avoid the debt trap.

He revealed encounters with some migrants who have been working in Hong Kong for 20 or more years, including those who volunteer at the Consulate, who have not saved for their eventual return to the Philippines.

“It is really tragic,” he said.

But he added, it is unavoidable for some to resort to borrowing due to unforeseen events. “Hindi rin natin mapipigilan ang ating mga kababayan na mangutang.”

So apart from asking the Hong Kong government to lower the legal rate of interest for loans and crack down on illicit loans, Morales said the Consulate has been spearheading effort to provide financial education to Filipino migrant workers.

Helping OFWs prepare for their eventual return home, as the CORP program of the Overseas Workers Welfare Administration plans to do, is another way to help them focus on their goal, and avoid unnecessary and burdensome borrowing.

CORP has teamed up with NGO Atikha in a project called Gear-Up, or “Go, Earn, Accelerate, Reform, Uplift Philippines” to further bring home the message that OFWs must focus on preparing for their eventual return home, with the support of the families they left behind.

Through this collaboration, OFWs will be encouraged to plan for their return from the time they arrive at their first job destination abroad.

According to Roel Martin of OWWA’s National Reintegration Coordinating Office, OFWs will be asked how long they intend to work abroad, and Atikha will help them plan on how to make this happen.

He said the NRCO has drawn up various strategies to help ease the return of OFWs to the country, like teaming up with various government agencies to enhance reintegration, providing more financial literacy classes abroad, drawing up investment opportunities for OFWs, and boosting local employment.